Question 1

Which of the following terms is NOT defined by statute in the Companies Act of the United Kingdom?

Accepted Answer

A) Accountant 
B) Auditor 
C) Independence 
D) None of the above terms is defined in the Companies Act of the UK. 
A) Accountant 
B) Auditor 
C) Independence 
D) None of the above terms is defined in the Companies Act of the UK.

Question 2

What does the Foreign Corrupt Practices Act have to do with accounting?

Accepted Answer

A) It requires that U.S.companies properly record bribes made to obtain business from foreign clients. 
B) It requires that appropriate internal control systems be maintained by publicly traded U.S.companies. 
C) It mandates the use of the temporal method of translating assets obtained illegally in foreign countries. 
D) It demands that publicly traded U.S.companies follow international best-practices when auditing illegal operations abroad. 
A) It requires that U.S.companies properly record bribes made to obtain business from foreign clients. 
B) It requires that appropriate internal control systems be maintained by publicly traded U.S.companies. 
C) It mandates the use of the temporal method of translating assets obtained illegally in foreign countries. 
D) It demands that publicly traded U.S.companies follow international best-practices when auditing illegal operations abroad.

Question 3

What act of the U.S.Congress advocated creating the Public Company Accounting Oversight Board, required financial statement certification by the CEO and CFO, and requires external auditors to report directly to an audit committee?

Accepted Answer

A) Securities Act of 1933 
B) Securities and Exchange Act of 1934 
C) Sherman Anti-Trust Act of 1890 
D) Sarbanes-Oxley Act of 2002 
A) Securities Act of 1933 
B) Securities and Exchange Act of 1934 
C) Sherman Anti-Trust Act of 1890 
D) Sarbanes-Oxley Act of 2002

Question 4

In what area is external auditing consistent internationally?

Accepted Answer

A) Audit report 
B) Auditing standards 
C) Regulation of the profession 
D) None of the above 
A) Audit report 
B) Auditing standards 
C) Regulation of the profession 
D) None of the above

Question 5

Who may bring civil litigation against an auditor?

Accepted Answer

A) Only the client company 
B) Only shareholders 
C) The client company and shareholders 
D) It depends on a country's laws governing auditor liability 
A) Only the client company 
B) Only shareholders 
C) The client company and shareholders 
D) It depends on a country's laws governing auditor liability

Question 6

In Germany, who do external auditors consider as their clients?

Accepted Answer

A) The government 
B) Board of directors 
C) Society as a whole 
D) All of the above 
A) The government 
B) Board of directors 
C) Society as a whole 
D) All of the above

Question 7

Which group is responsible for setting and developing auditing standards in the United Kingdom?

Accepted Answer

A) Department of Trade and Industries (DTI) 
B) Consultative Committee of Accountancy Bodies (CCA
B)  
C) Auditing Practices Board (AP
B)  
D) Institute of Chartered Accountants in England and Wales (ICAEW) 
A) Department of Trade and Industries (DTI) 
B) Consultative Committee of Accountancy Bodies (CCA
B)  
C) Auditing Practices Board (AP
B)  
D) Institute of Chartered Accountants in England and Wales (ICAEW)

Question 8

Under the Sarbanes-Oxley Act of 2002, who is responsible for paying the independent auditor?

Accepted Answer

A) Management 
B) Audit committee 
C) Government who has jurisdiction over the corporation 
D) American Institute of Certified Public Accountants (AICP
A)  
A) Management 
B) Audit committee 
C) Government who has jurisdiction over the corporation 
D) American Institute of Certified Public Accountants (AICP
A)

Question 9

Why is international harmonization of auditing standards important?

Accepted Answer

A) To be consistent with harmonized international accounting standards. 
B) To ensure the independence of external auditors of multinational corporations. 
C) To assure international capital markets that auditing has been consistent across companies. 
D) To reduce the authority of individual governments to enact accounting laws. 
A) To be consistent with harmonized international accounting standards. 
B) To ensure the independence of external auditors of multinational corporations. 
C) To assure international capital markets that auditing has been consistent across companies. 
D) To reduce the authority of individual governments to enact accounting laws.

Question 10

Why is litigation against external auditors, which is very common in the United States, virtually unknown in Japan?

Accepted Answer

A) Japanese auditors rarely make mistakes in their professional work. 
B) Such litigation is inconsistent with Japanese values of interpersonal harmony. 
C) Japan lacks a sophisticated court system for handling complex cases involving accounting matters. 
D) External auditors are not responsible for the quality of work performed for a corporate client. 
A) Japanese auditors rarely make mistakes in their professional work. 
B) Such litigation is inconsistent with Japanese values of interpersonal harmony. 
C) Japan lacks a sophisticated court system for handling complex cases involving accounting matters. 
D) External auditors are not responsible for the quality of work performed for a corporate client.

Question 11

What term is used to describe the relationships between a company's management, its board, shareholders, and other stakeholders that create a structure through which the objectives of the company are set, attained, and monitored?

Accepted Answer

A) Management control 
B) Corporate governance 
C) Internal auditing 
D) Government regulation 
A) Management control 
B) Corporate governance 
C) Internal auditing 
D) Government regulation

Question 12

According to international auditing standards, if audit work has been limited in its scope, the auditors have had a disagreement with management, or there is significant uncertainty associated with the financial statements, what kind of audit opinion should be rendered?

Accepted Answer

A) Disclaimer of opinion 
B) Unqualified 
C) Adverse 
D) Qualified 
A) Disclaimer of opinion 
B) Unqualified 
C) Adverse 
D) Qualified

Question 13

Why has corporate financial reporting in China not resembled reporting in Anglo-Saxon countries?

Accepted Answer

A) There was a lack of distinction between business functions and social service functions in Chinese reporting entities. 
B) China has only recently become involved in international trade. 
C) The concept of accounting was only introduced to China recently and therefore it has not had time to develop properly. 
D) The 1960's Cultural Revolution eliminated the requirements that Chinese corporations provide information on business operations. 
A) There was a lack of distinction between business functions and social service functions in Chinese reporting entities. 
B) China has only recently become involved in international trade. 
C) The concept of accounting was only introduced to China recently and therefore it has not had time to develop properly. 
D) The 1960's Cultural Revolution eliminated the requirements that Chinese corporations provide information on business operations.

Question 14

According to the International Auditing Practices Committee, financial statements have conformed to International Financial Reporting Standards (IFRS) if:

Accepted Answer

A) they have complied with at least 75% of the International Financial Reporting Standards (IFRS). 
B) they have complied with at least one-half of the provisions of the International Financial Reporting Standards (IFRS). 
C) they have complied with all requirements and interpretations of the International Financial Reporting Interpretations Committee (IFRI
C) . 
D) they have complied with most of the International Financial Reporting Standards (IFRS) or with U.S.GAAP. 
A) they have complied with at least 75% of the International Financial Reporting Standards (IFRS). 
B) they have complied with at least one-half of the provisions of the International Financial Reporting Standards (IFRS). 
C) they have complied with all requirements and interpretations of the International Financial Reporting Interpretations Committee (IFRI
C) . 
D) they have complied with most of the International Financial Reporting Standards (IFRS) or with U.S.GAAP.

Question 15

The OECD believes which group in a multinational corporation should oversee the financial reporting function to ensure that appropriate controls are in place to safeguard information integrity?

Accepted Answer

A) Mid-level management 
B) External auditors 
C) Board of directors 
D) Information systems department 
A) Mid-level management 
B) External auditors 
C) Board of directors 
D) Information systems department

Question 16

How does the principle of "joint and several liability" affect auditors in countries where it is applied?

Accepted Answer

A) This limits civil liability to only those people who conducted the audit negligently. 
B) All partners in the accounting firm can be personally liable for the negligence of any one partner. 
C) All audit partners are liable for the actions of the firm only up to the level of their investment in the firm. 
D) It creates limited liability for auditors accused of wrong-doing by their clients. 
A) This limits civil liability to only those people who conducted the audit negligently. 
B) All partners in the accounting firm can be personally liable for the negligence of any one partner. 
C) All audit partners are liable for the actions of the firm only up to the level of their investment in the firm. 
D) It creates limited liability for auditors accused of wrong-doing by their clients.

Question 17

What explains the reason for the historically very low (1/3% to 1/2%) limit on allowance for doubtful accounts in China?

Accepted Answer

A) The primary customer in China was the government, which was presumed to have very good credit. 
B) This is the international accounting standard for companies operating in eastern Asia. 
C) Prior to being admitted to the World Trade Organization (WTO), China was required to reduce its bad debt level. 
D) All of the above 
A) The primary customer in China was the government, which was presumed to have very good credit. 
B) This is the international accounting standard for companies operating in eastern Asia. 
C) Prior to being admitted to the World Trade Organization (WTO), China was required to reduce its bad debt level. 
D) All of the above

Question 18

What caused the U.S.Congress, the OECD, the International Federation of Accountants, and other organizations to enact stricter rules on corporate governance in recent years?

Accepted Answer

A) Sudden increase in world trade 
B) High-profile corporate scandals 
C) Significant decline in world trade 
D) Expansion of the European Union membership 
A) Sudden increase in world trade 
B) High-profile corporate scandals 
C) Significant decline in world trade 
D) Expansion of the European Union membership

Question 19

Which of the following groups is responsible for developing international auditing standards?

Accepted Answer

A) International Accounting Standards Board (IAS
B)  
B) International Auditing and Assurance Standards Board (IAAS
B)  
C) International Organization of Securities Commissions (IOSCO) 
D) Organization for Economic Cooperation and Development (OEC
D)  
A) International Accounting Standards Board (IAS
B)  
B) International Auditing and Assurance Standards Board (IAAS
B)  
C) International Organization of Securities Commissions (IOSCO) 
D) Organization for Economic Cooperation and Development (OEC
D)

Question 20

Which of the following is a main function of internal auditing in multinational corporations?

Accepted Answer

A) Preparing the annual report to corporate shareholders 
B) Selecting independent members for the board of directors 
C) Helping external auditors with the financial statement audit 
D) Monitoring risks and assessing their effect on the company 
A) Preparing the annual report to corporate shareholders 
B) Selecting independent members for the board of directors 
C) Helping external auditors with the financial statement audit 
D) Monitoring risks and assessing their effect on the company

Which of the following terms is NOT defined by statute in the Companies Act of the United Kingdom?

What does the Foreign Corrupt Practices Act have to do with accounting?

What act of the U.S.Congress advocated creating the Public Company Accounting Oversight Board, required financial statement certification by the CEO and CFO, and requires external auditors to report directly to an audit committee?

In what area is external auditing consistent internationally?

Who may bring civil litigation against an auditor?

In Germany, who do external auditors consider as their clients?

Which group is responsible for setting and developing auditing standards in the United Kingdom?

Under the Sarbanes-Oxley Act of 2002, who is responsible for paying the independent auditor?

Why is international harmonization of auditing standards important?

Why is litigation against external auditors, which is very common in the United States, virtually unknown in Japan?

What term is used to describe the relationships between a company's management, its board, shareholders, and other stakeholders that create a structure through which the objectives of the company are set, attained, and monitored?

According to international auditing standards, if audit work has been limited in its scope, the auditors have had a disagreement with management, or there is significant uncertainty associated with the financial statements, what kind of audit opinion should be rendered?

Why has corporate financial reporting in China not resembled reporting in Anglo-Saxon countries?

According to the International Auditing Practices Committee, financial statements have conformed to International Financial Reporting Standards (IFRS) if:

The OECD believes which group in a multinational corporation should oversee the financial reporting function to ensure that appropriate controls are in place to safeguard information integrity?

How does the principle of "joint and several liability" affect auditors in countries where it is applied?

What explains the reason for the historically very low (1/3% to 1/2%) limit on allowance for doubtful accounts in China?

What caused the U.S.Congress, the OECD, the International Federation of Accountants, and other organizations to enact stricter rules on corporate governance in recent years?

Which of the following groups is responsible for developing international auditing standards?

Which of the following is a main function of internal auditing in multinational corporations?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

International Corporate Social Reporting

Filters

Exam 14: Comparative International Auditing and Corporate Governance

Which of the following terms is NOT defined by statute in the Companies Act of the United Kingdom?

What does the Foreign Corrupt Practices Act have to do with accounting?

What act of the U.S.Congress advocated creating the Public Company Accounting Oversight Board, required financial statement certification by the CEO and CFO, and requires external auditors to report directly to an audit committee?

In what area is external auditing consistent internationally?

Who may bring civil litigation against an auditor?

In Germany, who do external auditors consider as their clients?

Which group is responsible for setting and developing auditing standards in the United Kingdom?

Under the Sarbanes-Oxley Act of 2002, who is responsible for paying the independent auditor?

Why is international harmonization of auditing standards important?

Why is litigation against external auditors, which is very common in the United States, virtually unknown in Japan?

What term is used to describe the relationships between a company's management, its board, shareholders, and other stakeholders that create a structure through which the objectives of the company are set, attained, and monitored?

According to international auditing standards, if audit work has been limited in its scope, the auditors have had a disagreement with management, or there is significant uncertainty associated with the financial statements, what kind of audit opinion should be rendered?

Why has corporate financial reporting in China not resembled reporting in Anglo-Saxon countries?

According to the International Auditing Practices Committee, financial statements have conformed to International Financial Reporting Standards (IFRS) if:

The OECD believes which group in a multinational corporation should oversee the financial reporting function to ensure that appropriate controls are in place to safeguard information integrity?

How does the principle of "joint and several liability" affect auditors in countries where it is applied?

What explains the reason for the historically very low (1/3% to 1/2%) limit on allowance for doubtful accounts in China?

What caused the U.S.Congress, the OECD, the International Federation of Accountants, and other organizations to enact stricter rules on corporate governance in recent years?

Which of the following groups is responsible for developing international auditing standards?

Which of the following is a main function of internal auditing in multinational corporations?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Strategic Accounting Issues in Multinational Corporations

International Corporate Social Reporting

Filters